An air tiara is made by combining an air talisman with a tiara. In order to combine it with a talisman, simply use the tiara on the air altar with an air talisman in your inventory. Doing so earns 25 Runecrafting experience.
An air tiara can be worn in the head slot, allowing the player to left click on the altar to get inside, as well as saving an inventory space. It also is much cheaper than an air talisman (like the other tiaras) providing another benefit.